Industry News, News, Top 3 Buy2Let Cars, Collateral, FundingSecure, Lendy, MoneyThing
There have been many legal cases to follow in the peer-to-peer lending and more broadly the debt investment space.
In July, the Lendy Action Group won its waterfall case against Lendy administrators RSM, with the judge ruling for model 2 investors to be given priority in distribution payments.
Also in the summer, a landmark court ruling backed a restructuring plan for Amicus Finance, which raised a total of £15,368,280 from Crowdstacker investors between 2015 and 2017, before falling into administration in 2019.
Furthermore, in August, London Capital & Finance bondholders withdrew their judicial review appeal against the Financial Services Compensation Scheme (FSCS) because they could not afford to pay the FSCS’ £600,000 legal fees if they were to lose.
However, there is more ongoing legal action in the sector.
Here Peer2Peer Finance News lists the ongoing legal cases that have the potential to shape the future of P2P and the wider alternative finance community…
Buy2Let Cars
Peer2Peer Finance News understands that a further arrest has been made relating to Buy2Let Cars.
This follows the companies behind car leasing provider Buy2Let Cars falling into administration in March last year and one person being arrested and a second person questioned by police in April.
The arrests formed part of a new fraud investigation into Raedex Consortium, the parent company of defunct lending platform Buy2Let Cars, and came after the Serious Fraud Office (SFO) launched an investigation into Raedex Consortium for running an unauthorised customer investment scheme.
The SFO has appealed to investors in Buy2Let Cars to help build their case by answering a questionnaire by 31 January 2022. The confidential questionnaire can be accessed here.
Collateral
On 7 January 2022, the City regulator commenced criminal proceedings against Peter Currie and Andrew Currie, two former directors of the collapsed P2P platform, with the brothers facing two charges under the Fraud Act 2006 and one charge under the Proceeds of Crime Act 2002.
It is alleged that the Curries falsely told investors that they were regulated by the Financial Conduct Authority (FCA) to operate a P2P lending business. They were asked to cease all regulated activities in January 2018, but before the company stopped trading the brothers allegedly abused their positions by transferring funds to a separate company.
The P2P pawnbroking and property lending platform collapsed into administration in February 2018 and entered into liquidation in April 2019.
FundingSecure
Last May, FundingSecure administrators CG&Co halted interim payments to investors after receiving a claim from a creditor relating to money in the client account under a legal term called a ‘quistclose trust’.
Then in November, CG&Co – which was appointed as administrators of FundingSecure in October 2019 following the platform’s collapse – said it had provided a significant amount of information at the creditor’s solicitor’s request.
The joint administrators said the suspension of payments to investors remains in place while the creditor’s solicitors continue to assert their client’s claim to the funds, and that it had sought advice about the return of investor funds.
Lendy
According to the Mouse in the Court blog, on 28 October 2021 the judge in a High Court case between Lendy’s administrators and claimants (including director Liam Brooke) gave permission for amendments before a case management conference later this year.
Lendy and its joint administrators can change their amended claim form and the particulars of the claim while the defendants have been granted the chance to edit their written submissions.
Lendy entered into administration in May 2019, leaving more than £160m outstanding on the loanbook, with at least £90m of those funds in default.
MoneyThing
MoneyThing has a court hearing scheduled for 17 February 2022, after lenders submitted witness statements in December.
The MoneyThing Action Group was set up in October to represent investors in the platform who are concerned about the level of costs incurred in running down the loanbook. The group has since grown to over 300 members.
MoneyThing originally entered into a solvent wind-down at the end of 2019, but it was pushed into administration in December 2020 after announcing that it could not afford to defend itself against future litigation from a borrower.
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